Currency Trading with the Right Attitude
To succeed in currency trading, it is not enough that you know the basics of trading and the market in general. You have to be of the right mindset and attitude to stick to your trading system and properly execute trades. Following are the attitude traits you must possess to enhance your chances of trading success:
Patience, as experienced traders would say, is a trader’s virtue. Once you have determined what to expect from your trading system such as the entry and exit points, have the patience to wait for the price to reach your target levels. If the system dictates entry at a particular price level, but the market fails to reach it, do not make a move. Just move on and find another opportunity.
Never force a move just for the sake of taking a position. Stick to your system. The forex market is so dynamic that there will always be other trades to make. To put it simply, never chase after a cab that just passed you by. Wait for next one to come.
Discipline is a trait that is characterized by patience. This means you can stay put until a certain action point is triggered by your system. There will be times when the price will not get to your expected price point. Show discipline by believing in your system and not second-guessing it. Discipline also requires pulling out of a position when the system dictates it. This is particularly crucial for stop losses to minimize the risk of incurring bigger losses from trades gone bad.
This trait, otherwise known as “emotional detachment,” also relies on the dependability of your methodology or system. If your system provides action points that you have proven to be highly reliable, then do not allow yourself to be emotional or be swayed by the opinion of others who are minding their own action points, and not yours. However, this likewise requires your system to be of proven reliability that you can be confident enough to act on the signals it gives.
Sometimes, the market may move at a lot faster pace than you initially anticipated. This may lead to bigger profits for you. However, you cannot expect this to happen in each and every trade you make. You also have to keep in mind that trading with short time frames are less risky, but usually bring less profit. On the other hand, long term time frames can rake in bigger profits, but the risks are also higher. In short, you have to weigh the risks versus rewards ratio.